Muscat: Darwish bin Ismail al Balushi, Minister Responsible for Financial Affairs said that the global economy is currently witnessing an unprecedented financial and economic crisis due to the COVID-19 pandemic and the sharp fall in international oil prices which caused negative impacts with worse-than-expected rates in all countries of the world without exceptions.
In a comments to Oman News Agency, the minister responsible for financial affairs said that the decrease in the price of Oman’s crude oil has led to a sharp fall in oil revenues which will affect the government’s ability to fund the implementation of the development and social spending programmes approved by the budget as well as expose the financial position to several risks.
Al Balushi added that the government has taken a set of measures to slash public spending in a bid to reduce the impact of the financial crisis. He noted that the financial effect from these measures is projected to surpass RO 1 billion in addition to RO 300 million in the revenues side.
These measures include: cutting current spending at the civil, military and security units by 10 per cent, reducing the allocations approved for the development budget by 10 per cent, reducing the administrative and operating expense for the state-owned companies by at least 10 per cent, cutting government subsidy to state-owned companies by 50 per cent, reducing the allowances of the board of directors of public authorities and establishments and their subsidiaries and committees by 50 per cent, reducing the financial allocations for official missions by at least 50 per cent at all civil, military and security units and government companies, negotiating with the owners of properties rented by the government units to reduce the rent by no less than 10 per cent, suspending the implementation of new capital projects of the state-owned companies and rescheduling existing financial obligation, suspending promotions and allowances for all employees of the state-owned companies regardless of the company’s financial results, suspending all overseas training courses, workshops, conferences and exhibitions for the civil, military and security units as well as the state-owned companies, suspending exceptional allowances for all government employees, suspending celebrations and non-essential events, prioritizing the private sector in the expansion and establishment projects at the state-owned companies, strengthening the role of the public-private-partnership, covering newly emerging financial obligations during the current year from the approved budget through the optimization of expenses without requesting extra allocations.
The minister responsible for financial affairs emphasised that these measures, although touching some approved spending priorities, are inevitable to sustain the finical stability given the current exceptional conditions.
The minister noted that the government will continue to follow up the evaluate the economic developments and the international oil prices in the coming period and will take more necessary measures while considering the priority to provide the requirements of the vital sectors like health and education. — ONA